Assume the following data for a stock: Beta = 1.5; risk-free rate = 4 percent; market rate of return = 12 percent; and expected rate of return on the stock = 15 percent. Then the stock is
A. correctly priced.
B. underpriced.
C. overpriced.
D. cannot be determined.
Answer: C
You might also like to view...
Blanton Corporation purchased 15% of the outstanding shares of common stock of Worton Corporation as a long-term investment. Subsequently, Worton Corporation reported net income and declared and paid cash dividends. What journal entry would Blanton Corporation use to record the dividends it receives?
a. debit Investment in Worton Corporation; credit Cash b. debit Cash; credit Dividend Revenue c. debit Investment in Worton Corporation; credit Income of Worton Corporation d. debit Cash; credit Investment in Worton Corporation
Which of the following is legal according to the Robinson-Patman Act of 1936?
A. Reciprocity B. Tie-in sales C. Whistle-blowing D. Quantity discounts E. Exclusive dealerships
How does one assess the impact of asset and liability recognition and their measurement?
All of the following increase the damage done by emotional labor EXCEPT ______.
A. being well suited for service roles B. interacting with aggressive clients C. high levels of interaction with customers D. suppressing negative emotions